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Posted by Caroline Ketley on December 10, 2015

Before the summer of 2008, numerous mortgage holders in Spain were suffering the effects of high interest rates that rose continuously year after year, added to rising living costs, making mortgage repayments more and more difficult as they struggled to stretch their monthly income to cover their outgoings.

At this point in time, the mortgage reference rate used to measure more than 90% of all mortgages in Spain was at its highest ever.

After the crisis hit, however, the Euribor has continued to fall, with the exception of short periods during 2010 and 2011, and it went from just short of a staggering 5.4% to below 0.1%, which is where it is hovering now.

The end of November saw the Euribor register below this magical figure of 0.1%, and December has seen the Euribor average at around 0.055%.

This means that for those taking out a 120,000-euro mortgage now, for 20 years at a rate of Euribor +0.5%, homeowners would be making a saving of more than 3,000 euro than they did seven years ago.

The Euribor has dropped considerably over the years partly due to efforts made by the European Central Bank (ECB) during the crisis years to stimulate the economy in Europe and maintain inflation at the optimum rate of 2%.

Over time, the maximum monetary authority in Brussels has gradually reduced the benchmark interest rate, which the Euribor usually follows, to also register at historic minimum lows. It currently sits at 0.05%.

This has been in place since September 2014 and has activated a multimillion public and private buying-up debt programme.

For now, everything seems to point to the fact that the Euribor is likely to maintain its current rate for the next 12 months.

This is very positive news for anyone thinking of taking out a mortgage now, particularly as banks are practically falling over each other to award new mortgages and gain new clients. Interest rates at the moment could not get any lower.

In just two years, the mortgage differential rate has been reduced by half and currently sits around the 1% mark. Some banks are even going below this rate.

Many of those interested in buying a property are also looking at fixed-rate mortgages, which have recently become popular, as some can be found for around 2% or less.



  • Spain
  • ECB
  • mortgages
  • fixed mortgage
  • Euribor
  • interest rates
  • property


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